Decision DRAFT ALTERNATE PAGES OF COMRS. BILAS & DUQUE (Mailed 7/28/00)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application by AT&T Communications of California, Inc., et al, (U 5002 C) for Arbitration of an Interconnection Agreement with Pacific Bell Telephone Company (U 1001 C) Pursuant to Section 252(b) of the Telecommunications Act of 1996. |
Application 00-01-022 (Filed January 24, 2000) |
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5.1.2. Issue 229: Reciprocal compensation components.
AT&T's Position: AT&T asserts the FCC adopted its Rule 711(a)(3) to acknowledge that CLEC networks and network architecture were likely to differ from the traditional tandem-and-end-office architecture that ILECs like Pacific employ. The FCC's Rule requires that, wherever a CLEC shows that its switches cover geographical areas that are "comparable" to the areas covered by an ILEC's tandem switches, the CLEC is entitled to the tandem rate elements as part of reciprocal compensation, says AT&T.
According to AT&T, it showed that its switches cover the same or greater area than do Pacific's tandems. AT&T maintains two separate non-integrated networks in California that provide local service - AT&T Communications' (AT&T-C) network and the TCG network. As AT&T's uncontroverted testimony shows, each of AT&T-C's 22 switches serves the entire LATA in which it is located. In almost every instance, this is a much larger geographic area than that covered by Pacific's tandems. Each of TCG's ten deployed switches covers geography that is equal to or greater than that covered by comparable Pacific tandems.
AT&T states that, notwithstanding this clear-cut showing of an entitlement to tandem compensation under FCC Rule 711(a)(3), the FAR rejects AT&T's request for tandem compensation. This ruling is inconsistent with other rulings in the FAR that clearly recognize the equivalence of AT&T's switches and Pacific's tandems. AT&T contends that it is inconsistent to rule on the one hand that Pacific's tandems and AT&T's switching centers are equivalent and serve as the "top" of each carrier's network, but then to rule that AT&T is not entitled to the tandem rate elements as part of reciprocal compensation.
AT&T's Comments (at 188-191) state that regulatory commissions all over the country have acknowledged that where, as in California, there are hundreds of ILEC end offices, but only a handful of CLEC switching centers, the CLEC switches are the equivalent of ILEC tandems - and CLECs should, thus, receive the tandem rate elements as reciprocal compensation.
Discussion: Both parties and the arbitrator agree that this issue is governed by FCC Rule 711(a)(3), but they disagree as to whether AT&T has met the requirements of the FCC's Rule.
At issue is whether AT&T has met the requirements of Rule 711(a)(3) which reads as follows:
"Where the switch of a carrier other than an incumbent LEC serves a geographic area comparable to the area served by the incumbent LEC's tandem switch, the appropriate rate for the carrier other than the incumbent LEC is the incumbent LEC's tandem interconnection rate."
This is a factual matter, which rests on the specific factual record relating to a particular carrier's network. In order to satisfy the requirements of Rule 711(a)(3), a CLEC's switch must "perform functions similar to those performed by an incumbent LEC's tandem switch". (FCC's First Report and Order, paragraph 1090) The CLEC also must cover a geographic area comparable to the area served by the incumbent LEC's tandem switch. The rule focuses on the area currently being served by the CLEC, not the area the CLEC may serve in the future.
AT&T did not meet the burden of demonstrating that its switches performed functions similar to Pacific's tandems. AT&T's witness Talbott had difficulty identifying exactly how many switches AT&T has in California. Putting aside the inaccuracy of AT&T's switch count for the moment, there is still much doubt as to whether the switches function as tandems. For example, in the Los Angeles area, AT&T's 16 or 18 switches are in contrast to Pacific's 7 tandems. As Pacific states, AT&T's switches operate more like Pacific's end-office switches than its tandem switches.
More to the point, AT&T did little more than declare that its switches perform both end office and tandem functionalities. AT&T Witness Talbott explains that "the Pacific network is comprised of two switching layers (a tandem switching layer and an end office switching layer) and relatively short metallic loops, whereas the AT&T network consists of only a single layer of switches providing both tandem and end-office functionality with very long fiber-optic rings and, possibly, extensive hybrid fiber-coax distribution plant." (Direct Testimony of David Talbott, page 5) AT&T does not explain how a single layer of switches with long fiber-optic rings and/or a hybrid fiber-coax distribution plant can serve the same functions as two layers of switches. As noted in the FAR, Pacific criticizes AT&T's explanation by stating that AT&T's network does not involve functions similar to a tandem. Pacific argues that AT&T's claim of "transport" (which refers to the transport between a tandem and end office) is in reality non-traffic sensitive loop plant.
AT&T claims that it serves a larger geographic area than Pacific's tandems. AT&T presented transparencies to prove its case. For example, AT&T's witness Talbott sponsored several attachments intended to demonstrate comparable serving areas in various LATAs in California. For example, Attachment 113 graphically shows the area that Pacific's tandems cover in LATA 722 (also referred to as LATA 1 in California). Attachment 114C shows AT&T coverage area in LATA 722. Both Attachments have been marked proprietary. However, in general, the maps do not appear credible. According to AT&T's Attachment 113, much of San Francisco is not served by a Pacific tandem; this is not true, Pacific's tandems serve all of San Francisco. Equally suspicious is that AT&T's Attachment 114C suggests that it serves large areas of unfiled territory, such as in Del Norte County. In other locations, AT&T showed cases where certain LATAs did not contain switches. Apparently, AT&T would have to use facilities outside of those LATAs to serve customers. AT&T did not explain how this would occur. These problems call into question the reliability of the evidence AT&T relied upon to prove its case.
AT&T presented no evidence of where its customers are located. Rule 711(a)(3) states "Where the switch of a carrier other than an incumbent LEC serves a geographic area comparable to the area served by the incumbent LEC's tandem switch, the appropriate rate for the carrier other than the incumbent LEC is the incumbent LEC's tandem interconnection rate." (emphasis added) This rule indicates that a CLEC must currently be serving a geographic area. Instead, AT&T simply relied upon the geographic area that its switches could serve. Indeed, AT&T's Witness Talbott states that "AT&T Communications has the ability to offer local exchange services across virtually all of the geographic area served by Pacific using fewer switches than Pacific uses tandems." "Moreover, in general, TCG is able to connect virtually any customer in a LATA to the TCG switch serving that LATA ..." (Direct Testimony of David Talbott, pages 25 and 26, emphasis added). The ability to serve an area or plans for future customers does not satisfy this requirement.
In summary, AT&T has failed to meet any of the elements required by the FCC's rule. Therefore, AT&T is not eligible to receive the tandem interconnection rate.
1. Nothing about the result of this arbitration is inconsistent with governing federal law.
2. All amendments to agreements must be submitted by advice letter, and approved pursuant to Rule 6.2 of Resolution ALJ-178.
3. As required by Resolution ALJ-178, the interim rates adopted herein must be revised on a going forward basis to incorporate the rates adopted in OANAD.
4. No arbitrated portion of the Agreement fails to meet the requirements of Section 251 of the Act, including FCC regulations pursuant to Section 251, or the standards of Section 252(d) of the Act.
5. No provision of the Agreement conflicts with State law, including compliance with intrastate telecommunications service quality standards, or other requirements of the Commission.
6. Pacific is entitled to receive compensation for the costs associated with the use of its network to transmit traffic with disparate rating and routing points.
7. AT&T did not demonstrate that it has met the requirements of FCC Rule 711(a)(3) to be entitled to receive the tandem switching rate. Therefore, AT&T should not receive the tandem switching rate.
8. The adopted collocation terms and conditions are in compliance with the FCC's Advanced Services Order.
9. The FCC's Rule 51.319(a)(1) does not require unbundling of the splitter.
10. Under Section 252(b) of the Act, the Commission has the authority to resolve any open issues brought before it in an arbitration.
11.
